Irda plans to introduce electronic re-insurance platform

MUMBAI: With a view to improve transparency in reinsurance contracts, the sectoral watchdog Irda today said that it is planning to introduce an electronic re-insurance platform for insurers.

"We are going to come out with re-insurance platform for both local and foreign re-insurers," Insurance Regulatory Development Authority chairman J Hari Narayan told reporters here on the sidelines of a global meet on actuaries here.

The Irda had taken up an ambitious programme of designing an exchange or an inter-faceted, interlinked, electronic platform on which reinsurance broking transactions can be executed.

"The entire operation on the reinsurance side will be done through this particular platform once it is in place," Narayan said.

State-run General Insurance Corp, which is the sole reinsurer has already introduced an electronic trading platform 'eThru' for its business associates.

Narayan also said that there is a need to widen and deepen the insurance distribution system.

"Out of the 90,000-odd bank branches, only 13,000 branches offer insurance products today. The question is how to widen and deepen the insurance distribution network," he said, adding 43 general and private insurance companies have entered into partnership with various banks for distributing their products.

The calamities like the massive tunami in Japan last March, recent floods in Thailand and earthquake in New Zealand have increased the claim burden and cost of insurance,he said.

Meanwhile, life insurers' new business premium dropped by 25-30 per cent in FY12 so far compared with previous year, Institute of Actuaries of India president Liyaquat Khan said.

The growth in life insurance new business premium has slowed down due to regulatory changes. These changes are positive but they were introduced by Irda suddenly and insurers have been unable to adopt changes, Khan said.

Several insurers have already started making structural changes and with their global partner's, the industry will make more business in coming days, Khan said.